Posted on March 07, 2013 09:45:56 PM
BusinessWorld Online

PROPERTY DEVELOPER Ayala Land, Inc. has raised an approximately P12.2 billion from the overnight sale of 399.53 million shares in order to generate funds for expansion this year, the firm said in a disclosure yesterday.

“Ayala Land has completed a placement of 399,528,229 Ayala Land common shares at a price of P30.50 per share, equivalent to a 3.6% discount on the five-day volume-weighted average price of the Ayala Land stock, raising an aggregate of about P12.2 billion in proceeds,” the disclosure read.

UBS Investment Bank served as sole bookrunner and placement agent for the deal, the disclosure added.

“This round of equity placement will further provide Ayala Land the flexibility to pursue its growth plans as it continues to build a robust development pipeline moving forward. We are… once again encouraged by the support of the investing community,” Jaime Augusto Zobel de Ayala, president and chief executive officer of Ayala Land parent Ayala Corp., said in a separate disclosure.

The offering was three times oversubscribed, prompting Ayala Land to upsize the issue from an original 320 million shares, the disclosure read further.

Ayala Land aims to use the proceeds from the share sale for capital spending this year. “The company will use the proceeds of the share placement primarily to fund its next phase of development, enabling it to sustain its high growth trajectory,” the disclosure added.

Ayala Land has earmarked P65.5 billion for capital spending this year — with roughly P46 billion for project completion and another P20 billion for land banking — to help bankroll about 69 projects worth a total of P129 billion.

Ayala Land was formed in 1988 when Ayala decided to spin off its real estate division into an independent subsidiary to enhance management focus on real estate.

The company grew its net income by 27.69% to a record P10.33 billion last year from P8.09 billion in 2011, driven by strong sales of its residential business.

Revenues in the same comparative periods — consisting of real estate sales, interest and investment income, equity in net earnings of associates, and other income — rose by 23.32% to P54.52 billion from P44.21 billion, while costs and expenses rose by 23.28% to P41.30 billion from P33.50 billion.

Ayala Land shares plunged by P1.85 or 5.63% to close at P31.00 apiece yesterday from P32.85 last Wednesday.

Ayala Land’s fall — attributed to its massive share sale at a discount — was the single biggest factor cited by analysts for the bourse’s huge drop yesterday. The Philippine Stock Exchange index slid by 110.08 points or 1.61% to close at 6,725.13, while the broader all-share index dropped by 50.89 points or 1.20% to 4,206.90.

While sectoral indices dropped across the board, the property index — to which Ayala Land belongs — showed the biggest fall of 86.03 points or 3.03% to 2,750.51. — Franz Jonathan G. de la Fuente

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